Photo has been used for representation only. , Photo Credit: Reuters
The rupee on Friday strengthened by 63 paise to close at a one-month high of 81.97 (provisional) against the US dollar as fresh foreign fund inflows and positive domestic equities supported investor sentiment.
Forex traders said positive PMI services data also boosted investor sentiments.
At the interbank forex market, the local unit opened at 82.28 against the American currency and finally closed at 81.97 (provisional) against the greenback, registering a gain of 63 paise over its previous close of 82.60.
The rupee touched a high of 81.92 and a low of 82.35 against the dollar during the trading session.
Anuj Chowdhary, research analyst at Sharekhan by BNP Paribas, said Indian rupee rose to a one-month high on hot service PMI data.
The Indian services sector expanded at the strongest rate in 12 years in February, supported by favorable demand conditions and new business gains, a monthly survey said on Friday. The seasonally adjusted S&P Global India Services PMI business activity index rose from 57.2 in January to 59.4 in February – its highest level in 12 years.
“We expect the rupee to trade with a marginally positive bias on improving global risk sentiments and fresh FII inflows. Weak crude oil prices may also support the domestic currency,” Mr Choudhary said.
However, any further slide in the US dollar amid rising expectations of a dovish Federal Reserve and concerns over a slowdown in India’s GDP growth may cap the upside and put pressure on the rupee at higher levels.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.19% to 104.82.
Global oil benchmark Brent crude futures fell 0.55% to $84.28 a barrel.
On the domestic equity market front, the 30-share BSE Sensex advanced 899.62 points, or 1.53%, to close at 59,808.97, while the broader NSE Nifty advanced 272.45 points, or 1.57%, to 17,594.35.
Foreign institutional investors (FIIs) were net buyers in the capital market on Thursday as they bought shares worth Rs 12,770.81 crore, according to exchange data.